Understanding Rework Costs and How to Avoid Them
Imperfect processes yield imperfect products.
The problem of rework has afflicted businesses since the first handcrafted goods. And as the speed at which items are developed increases exponentially due to the adoption of automation technology, the dilemma has only compounded. Thus rework continues to plague contemporary industries to this day.
Identifying Rework
Rework is the process by which items are corrected due to defects or resulting from failure to meet inspection standards. Rework can include the need to repair, replace, and disassemble/reassemble the questionable products. Sometimes rework leads to scrapped products altogether.
Though most processes allow for a margin for error, the majority of manufacturers far exceed these buffer margins. Execution errors can cause faults in products, as can machine malfunctions. Past due machine maintenance increases the frequency of defected final goods as can changes in processes that are not fully communicated to the workforce. The manner of transport, or inaccurately predicting how products will be used and abused by customers, can result in recalls and unplanned modifications.
Thus it’s crucial to identify the points in your workflows that can potentially contribute to the need for rework and integrate proactive plans to overcome these obstacles.
Addressing the True Costs of Rework
Time — Manpower
As the old adage says: time is money. More specifically, time spent performing rework is time stolen from doing other work, eating at the human resources you likely need to expend on day-to-day deliverables, often resulting in product delivery delays or paying employees overtime to complete tasks a second time.
Money — Materials
Duplication of materials can increase the overall cost of the end product. This is especially important depending on the surge in supply and demand for your raw material costs. This increase in cost will either be passed on to the customer via raised prices or at a direct loss to your business.
Beyond these hard costs of time and money, managers should also consider the soft costs associated with rework.
Employee Morale
Nothing demotivates workers more than work duplication. No one wants to have to repeat work they’ve already completed previously. Feeling like a system or workflow is broken or flawed can affect employee motivation. As morale decreases, so does productivity and employee retention.
Customer Confidence
It is an unfortunate day when your customer receives a product from you that isn’t up to their expected level of quality. Over time, this will erode a customer’s belief in your business and directly impact your company’s bottom line. Social media exacerbates this as one mistake can be shared with millions of consumers in a single click.
Can Rework be Avoided?
Now that you understand what rework is and its potential costs, you might believe that the “mistakes” that lead to rework are unavoidable, but there are clear ways to minimize them. Your business can utilize these methods to address quality control issues before they become an issue.
Tracking Points of Failure
Are you able to identify how and where these mistakes are occurring? What is the frequency of these mistakes? Who is making these mistakes? Is it seasonal or veteran employees?
It’s impossible to solve a problem that you’re unaware of, but modern machinery collects a staggering amount of data. You can now track things like optimal maintenance on a machine and identify methods to achieve maximum results. Identifying, tracking, and implementing the lessons learned from key data points can reduce rework.
Communication and Training
How do you relay changes to your workforce and ensure your workers are properly trained?
Be consistent in surfacing the most current documents with new employees. Consistency in onboarding is key to maintaining product consistency. Reviewing and refining onboarding processes to reflect current work standards can reduce rework.
Documentation and Checklists
Do your employees know what workflows are the most current?
Make sure your instructions are accurate and up-to-date. One way to guarantee this is a shift away from paper and toward digitization. In addition to the certainty of accuracy, electronic workflows can be updated across the board simultaneously and ensure adherence to standardized processes.
This shift is also known as the Fourth Industrial Revolution, as discussed in our recent piece, Augmented Reality and the Fourth Industrial Revolution: An Overview.
Stop Rework Now
The first step in stopping rework is identifying the problems that cost you and your business time and money and reduce overall growth potential.
And there’s no better time to start than now.
To understand just how within reach this next evolution for your company is, speak with a Mira consultant today.
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